Australian gold company Southern Gold has signed an agreement with Northern Star with respect to the Cannon Gold Mine.
Northern Star, a subsidiary of Northern Star Resources, acquired HBJ and control of the South Kalgoorlie Operations from Westgold Resources Limited in March 2018, which includes a 5 year right-to-mine agreement between HBJ and Southern Gold, designed to enable the underground development phase at Cannon. For various operational and strategic reasons HBJ has determined not to exercise the right-to-mine and has agreed to restructure the arrangement with Southern Gold.
The new arrangements entail:
- The termination of all legal agreements between the parties, including the right-to-mine agreement and previous legal agreements executed during the open pit phase of the operation;
- The transfer by HBJ of mining lease M25/357, covering the Georges Reward deposit immediately to the north of Cannon where approximately the northern third of the Cannon open pit is, and miscellaneous license L25/48 covering a portion of the Cannon haul road to the Golden Ridge rail crossing (Figure 1); and
- Southern Gold assumes HBJ’s half share of the rehabilitation liability for the open pit, currently estimated by a third-party consultant to be approximately $77,500 (or $155,000 in total in today’s dollars) and excludes the cost of rehabilitating the haul road on L25/48 which is to remain in use.
The agreement completion is subject to Ministerial consent under section 82(1)(d) of the Mining Act and regulation 41(c) of the Mining Regulations 1981 and a third party consent to the assignment of an access agreement affecting L25/48.
The transfer of the tenements come with all associated technical data. There is no purchase price payable by Southern Gold for the tenements.
Source: Company Press Release